Ghana to increase cocoa farmgate price by 45% for 2024/25 Season to curb smuggling and boost farmer incomes
Ghana is set to increase the state-guaranteed price paid to its cocoa farmers by nearly 45% for the 2024/25 crop season, according to sources familiar with the price review process.
This substantial price hike aims to enhance farmers’ incomes and prevent the smuggling of cocoa beans out of the country.
Currently, the world’s second-largest cocoa producer had raised the farmgate price by over 58% in April 2023 to 33,120 cedis ($2,123.08) per metric ton, equivalent to 2,070 cedis per 64-kilogram bag, for the remaining part of the 2023/24 season. This increase followed neighboring Ivory Coast, the top cocoa producer, which had raised its farmgate price to 1,500 CFA francs ($2.55) per kilogram for the April-to-September mid-crop period.
According to one source, Ghana’s cocoa producer price review committee has now set the price at 48,000 cedis per ton, or 3,000 cedis per 64 kg bag, for the upcoming 2024/25 season, representing a near 45% increase. The decision is pending cabinet approval, although it is expected that the cabinet will not alter the committee’s decision to avoid pushing COCOBOD, the national cocoa marketing board, into a deficit.
The increase also aims to align Ghana’s farmgate price with that of Ivory Coast for the 2024/25 season, which is yet to be announced. The two countries have been working together to coordinate farmgate prices and cocoa supplies, aiming to sustain the cocoa sector and improve farmers’ livelihoods.
Cocoa prices have remained strong this year, driven by disease outbreaks and adverse weather in Ghana and Ivory Coast, which together produce more than 60% of the world’s cocoa. This situation has led to a third consecutive year of market deficits. The International Cocoa Organisation recently raised its global cocoa deficit forecast for the 2023/24 season to 462,000 tons, marking a 45-year low in the stocks-to-grindings ratio.
COCOBOD had initially planned to launch the 2024/25 season on September 1 with a reduced production target of 650,000 tons. However, the season’s opening will likely be delayed. The early launch was intended to combat bean smuggling, which has been exacerbated by low prices and delayed payments to farmers. Some cocoa farmers and licensed buyers in Ghana have accused stakeholders of hoarding beans in anticipation of the price hike in the new season.
